SEBI proposes ways to ease corporate fundraising via share sales

Bengaluru: The Securities and Exchange Board of India (SEBI), on Tuesday that companies be allowed to also sell shares to new investors, in addition to existing shareholders, to raise funds, among other measures to ease corporate fundraising.

The regulator also proposed that a company allow other investors to buy into an unsubscribed portion of a so-called rights issue, in which existing shareholders get the right to buy more shares from the company at a discount.

The SEBI, in a consultation paper, also proposed large shareholders can give away their allotment to select investors.

SEBI proposed that companies need not hire a merchant banker for a rights issue and to halve the timeline for issuing securities to 20 days from the date of approval.

It also said that the related corporate disclosures must include the price, record date, entitlement ratio and the purpose of the funds from the rights issue.

Earlier this month, SEBI chairperson, Madhabi Puri Buch, said the regulator was working to merge rights issues and preferential allotments to expedite fundraising.

The regulator has invited comments on its latest proposals by Sept. 10.